SGZ.L Share News (SGZ)

LONDON (Alliance News) - Scotgold Resources Ltd said on Thursday it has sold its subsidiary SGZ France SAS, which operates the French exploration licence Vendrennes to Ikigai Ltd for a total of EUR1.0 million.

The sale is for all 200,000 shares in SGZ France for an initial payment of EUR100,000, with a deferred payment of EUR900,000, conditional on the completion of certain development milestones.

The sale is conditional on acknowledgement from the Minerals Resources Officer of the Ministry for Economy and Finance of France, and must be received within three months from the date of the share sale agreement.

In addition to Vendrennes, SGZ France also holds applications for the exploration licences of Penlan and Olivet. If the Penlan licence is granted to the subsidiary, Ikigai must offer it to Scotgold Resources for EUR1.00.

"We are delighted to have sold our French subsidiary on the terms offered. We strongly believe in the potential value of the assets, however, given our current focus on the Cononish project with its exciting developments and the recently announced planning permission, we are pleased to have attracted a purchaser who can progress the French licences, making the sale mutually beneficial," said Chief Executive Officer Richard Gray.

Shares in Scotgold Resources were up 1.2% at 32.90 pence on Thursday.